China

I’m not sure these economists have spent time in the Rust Belt, then. Entire cities were economically destroyed from the offshoring of jobs to China and other low-cost areas.

Modern economists are completely out-of-line with reality on many things, "life outside of George Mason University" being one of them.

Pick your flavor of elitist sub/urbanism, it doesn't matter, none are substantially different.

(HN's poor Markdown formatter transfers asterisks cross-paragraph, so what was originally "George Mason University (asterisk)" and "(asterisk)Pick your flavor" just made everything between italicized.)

It's not just China. It started with Japan, and even without China, it will continue in Pakistan, Indonesia, and Vietnam, and eventually it will be replaced by automation.

So we know international trade is a thing and we know specialization is a thing. We know economies will over time become more value add and go up the chain.

That’s not a problem if we put in place policies and regulations that put our workers on even footing with foreign workers. Benefits, protections (OSHA), anti-dumping, market-based pay (no institutional labor), IP protections, even access to markets, etc. that is handicap any imports proportionately for not meeting those baselines.

I don't follow. How would increasing the cost of labor in the US make it more competitive against foreign labor?

But don't a lot of people who live in the Rust Belt shop at Walmart and benefit from cheaper prices generally? I haven't seen any "made in America" competitor to Walmart that's thriving because there's so much demand from customers who are willing to pay more to buy domestic made goods.

Having access to cheap goods might not make up lost jobs, but weren't most of the manufacturing jobs in the Rust Belt automated away rather than being offshored? Since 1990, production of metals in the U.S. has held roughly constant, but the number of people employed in the industry has fallen steadily. So it's not like the steel mill jobs from the Rust Belt were shipped overseas, they were just automated away.

The Rust Belt lost most of its jobs prior to 1990, so I’m not sure how that’s relevant data.

I find it a bit hard to understand how someone could suggest that having access to garbage cheap Walmart goods would make up for the utter destruction of a region’s economy. A good place to observe this is southwestern Pennsylvania: there are hundreds of former industrial towns which are now almost completely empty. Drug use is also rampant in these areas and indeed it’s easy to make a direct connection between offshoring jobs and the opioid epidemic.

Foreign trade policy is not defined via consumer preferences. It's the exactly the same as for environmentally sound products: the burden is not on consumers to choose better, but on government to regulate the market.

Umm...economists know all about this. I taught international trade classes out in North Carolina. Talked to numerous people affected by the loss of textile manufacturing. There's a massive literature, going back decades, on the topic.

I wish there was a way to raise the level of discussion on HN. Instead, completely uninformed comments like this get upvoted.

Some of those low cost areas are in the country. A lot of the Rust Belt jobs moved within the USA to the South (especially with the auto industry), which is one of the reasons top line US industrial production is pretty stable/growing but you have some very obvious depressed industrial regions.

Perhaps my comment was a bit dismissive, but I think the general point stands: academic economists don’t live in the places that have been economically ruined by offshoring jobs. University professors are white-collar professionals and don’t live in run-down, economically-dead towns.

It’s easy to draw abstract analyses from afar, but without actual hands-on experience, you end up with unexpected side effects - like the current rise of populist protectionism.

Your comment seems very anti-intellectual, which is surprising to find on HN. Academics do not need to live in a place in order to study it rigorously.

Not being blasé, but the rust-belt is the trade-off for globalization. The US asked the rest of the world to open up their markets for American goods and services and promised to do the same.

Where do you think the jobs in the rust belt came from?

The same thing happened to artisan economies with factories during modernization, yet people didn't decry the loss of the local blacksmith when the rust belt took over their jobs too.

The transition from local to city to regional to global specialization is a natural effect of economies of scale. Trying to freeze economic development and preserve the status quo is like trying to push water uphill.

The attitude that “it’s just a trade off” is exactly the problem with abstract analysis. Millions of people in the Rust Belt lost their livelihoods and thousands of cities were economically destroyed. Maybe it was overall beneficial for Americans, but that isn’t the point I’m making.

The point is that academic economists pushed policies that had unintended side effects (populism and protectionism) that perhaps they would have anticipated if they had actual experience in the areas that were affected.

Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.

It's not clear to me that people discussing the overall economy should also be charged with discussing the political outcomes of the outcome -- that's the role of the politician who chooses to act on the data provided by the economist.

That is, it's not the economists job to predict that the demolishment of the rust belt will lead to Trump's election; their job is to predict that the demolishment of the rust belt will bolster the coastal cities, and improve the health of the American economy in general.

Also notably, towns come and go based the industries they support -- it has happened in the past, and will happen in the future. It's simply the inevitable outcome of an ever-evolving economy. How to mitigate the impact of that fact is not the really job of the economist.

And economists are not expected to live in the towns they discuss.. the local politician is intended to represent the local concerns. If he's failing to do so, or failing to have any impact, the economist can merely say "this is what will probably happen, if you do this and don't do that", and nothing will happen.

Our workers would not want to be on even footing with workers who have few to nil safety standards and poor labor laws.

I don't see how it was anti-intellectual. The reality is some combination of trade policy, automation and massive income inequality led us to electing a narcissistic reality TV star to be President.

The bargain of cheaper goods in return for us moving up the value chain may be good for GDP, but we have left tens of millions behind in the process, and they are pissed.

I am pro free-trade, but we need to come up with a system that more equally distributes the gains. You can't kick millions of people out of work, leave them to fend for themselves and not expect massive societal issues.

There was most certainly massive push back against industrialization. The Luddite movement being one obvious example.

In the US we ended up with 40 hour work weeks, and universal high school as a government response. We will need similar large measures to deal with globalization and automation this time as well.

Precisely, and as the history of automation has shown, having a social safety net to retrain and shift workers is critical.

Unfortunately the focus is on blaming immigrants and other countries, not helping the disenfranchised American workers get back on their feet. It's easier to be an angry luddite but it's also historically the wrong side to be on.

>Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.

Economists do not enact those policies -- they suggest policies. The fisherman also suggests policies to benefit his own work, just as the steel worker suggests his own policies, and just as the architect, the construction crews, the parents, the etc..

These policies are aggregated, and enacted, by your politician (of cascading hierarchy), whose job is to do that -- review the possible set of policies and their impact on different areas of his total domain, and with this overarching view, enact policies. The fisherman does not himself review his policies for how they would impact the steel worker, and neither does the economist review his policies for how they will impact the presidential election.

If your local politician is blindly following the recommendations of the economist, without concern for the rest of his domain, whose fault is that but the politician's?

The economist is not supposed to be an expert in all things about the world, and it would be absurd to imagine him to be. He is intended to be an expert of his domain (economics), and is meant to be one of many experts, each supplying their own, scoped, understanding of the world.

If the economist claims that his suggested policies will purely benefit all aspects of the economy, and have zero negative impact, then it would be fair to blame him, because he was plainly incorrect about the area he's intended to be an expert in. But if he fairly claimed that it would generally be beneficial, but certain areas of the economy would be impacted negatively in such a fashion, and his predictions are generally correct, then he has done his job without fault. The decision to enact the policy, knowing the benefits and the losses, is not made by him.

At the city and regional levels, workers could at least go where the added jobs are and compete on the same terms (regulations and cost of living). At the global level that’s rarely permitted.

> The point is that academic economists pushed policies

Sure, the Chicago school of economics has been banging this particular drum for ages, but it found a responsive ear in the "deciders" in both public and private spheres from the late-80's.

This rust-belt is a symptom on ongoing class warfare, pure and simple - China only happens to be a tool (and a convenient scape goat). The global domination of Wall Street and Silicon Valley is the flip-side of the globalism coin.

I'd say on average the US benefitted, but this hasn't been evenly distributed (capital wins). How do you fix that without using any big-government, pinko communist/socialist interventions? (being sarcastic here, but that's ironically a big part of rust-belt politics).

No markdown, just https://news.ycombinator.com/formatdoc.

“The rust belt is the trade off for globalization”

I want to frame this.

If that’s the trade off, it wasn’t worth it. Glad we are finally being honest, though. Could’ve used a bit more of this frankness in the 1990s.

>Academics do not need to live in a place in order to study it.

I mean, pretty sure biologists would disagree. Maybe economists need to rethink their trade if that’s the prevailing mindset. The idea that you are modeling a social structure that you don’t think you need to have ever been a part of or experienced is pretty rich.

Also, correct me if I’m wrong, but my impression is that the US opened its arms to free trade and the rest of world shrugged and took advantage. Non-reciprocal free trade might be good for the US economy on the whole, but when a handful of people control half the wealth, and their half is the part of the economy that reaps the benefit while everyone else sees full time employment harder to come by and inflation adjusted wages stand still for 3 decades, I think it’s probably a bad policy for a democratic republic.

Indeed academics do not need to live in a place to study it, but they need to live there to feel it.

> my impression is that the US opened its arms to free trade and the rest of world shrugged and took advantage.

The rest of the world also took hits in some industries - US farm subsidies destroyed corn farming in poor countries

Different US industries fared differently - without globalization, Silicon Valley (and American tech in general) as well as Wall street wouldn't be as globally dominant as they are

> I think it’s probably a bad policy for a democratic republic.

I think it could work great for a democratic republic with sane corporate tax and safety net policies to more evenly distribute the upside

>I think it could work great for a democratic republic with sane corporate tax and safety net policies to more evenly distribute the upside

True. But how would modern medicine have faired?

I think the bigger issue with globalization is that it has a huge environmental impact and makes our species more susceptible to the effects of climate change.

We ought to at least enforce free trade policy better; I can tell you first hand that competing against unregulated competitors in manufacturing is hilariously unfair. If we really cared about the Environment or Human rights we would at least level the playing field in markets we control. It’s cheaper to buy from China largely because of our regulatory environment.